Bitcoin SV investment opportunities in 2021: VCs speak out on how they see the industry
How do some of the Bitcoin SV (BSV) ecosystem’s main investors see the scene in 2021? Was 2020 an endurance test, a challenge, or an opportunity for Bitcoin? We asked some of them for their thoughts: Paul Rajchgod, managing director, Private Equity – Ayre Group, and Alex Fauvel, general partner of Two Hop Ventures, share them here.
Given the solutions it provides, BSV exists within the “regular” business/financial world—but has a unique set of circumstances that set it outside that world as well. It’s a new and largely untried technology with value more in its potential than actual use (at this stage). It’s a relatively new, and growing industry. While 2020’s economic pressures affected investments, it also saw new opportunities and sought to capitalize on the changing situation.
Investors Unbounded Capital also said they were “more bullish than ever” on BSV in 2021 and beyond. Like others, they’ve been impressed by the creativity and development talent in the space. While all lamented the restrictions on travel and face-to-face meetings that have always been vital to business relationships, they’ve made their best attempts to work around it. No one can afford to simply lie low.
In fact, 2020 may have even been a “neutral” year for venture investments in the BSV space. Given that year’s economic turmoil, that’s probably a plus. Building the Bitcoin ecosystem remains the top priority for the coming year, as well as seeking new use-cases in big data and tools that make BSV easier and more accessible for everyone to use.
Check out the interview below for more details on how VCs assess the past and current years, and what could be coming up next.
BSV Venture Investing in 2020 vs. 2021: Interview with Paul Rajchgod (Ayre Group) and Alex Fauvel (Two Hop Ventures)
What was the most significant (in either money or strategic importance) investment you made in 2020?
Paul: That’s difficult to say! They all have incredible potential. We invested in the leading wallets in the Bitcoin SV ecosystem that we already had positions in and were happy to step up again and support their ongoing growth. Some are startups with unique IP and solutions that use Bitcoin SV “in the background” to solve real-world challenges, some are exchanges and fiat on/off-ramps that help increase global access to Bitcoin SV, and some are still in stealth mode and haven’t been announced yet!
Alex: I believe it is a little too early to say which is the most significant project strategically since the geopolitical landscape seems to be changing so rapidly, however, we are particularly pleased with the progress of HandCash in the past few months. Further, Dokkz being named as one of the top 33 document management services was also a nice surprise and validation that data is where the future of Bitcoin lies and we will continue to explore various methods of uploading and interacting with data on the blockchain.
Would you say 2020 provided some good opportunities for those looking to invest in the BSV ecosystem? Or was it worse/neutral?
Paul: I would say 2020 was absolutely a great year for investment opportunities in Bitcoin SV. Whether they are companies entirely new to blockchain technology or porting over from other failing blockchains, the number and variety of companies building on Bitcoin SV are growing all the time, and this just accelerated in 2020.
Alex: 2020 was without a doubt one of the strangest years the world has ever experienced and while the situation provided some potential opportunities for showcasing Bitcoin’s abilities, it also mainly created distractions for those within the ecosystem and those we are trying to solicit to join the BSV movement. Interest in Bitcoin and crypto has spiked mainly due to the consistent price increase but also to a lesser extent the uncertainty of economies. The bad aspect of 2020 was that it has been painful for almost everyone trying to start a business, however, the good is that the cracks in our current infrastructure as now plain to see for anyone that chooses to look. I believe that 2021 will bring many truths to light, while 2020 will be seen as the year the truth was kept in darkness. This will include a shake-up of the current crypto narrative and a shift towards the understanding that those in the BSV community have of honesty and the rule of law. For example, FinCEN seems to have grasped a number of key points in their latest report concerning anti-money laundering regulation aimed at closing loopholes that I first recognised in the United Kingdom’s approach in 2017.
How did the 2020 pandemic situation affect the BSV investment environment?
Paul: I think it was neutral. I find that many businesses (and business models) today are very accustomed to change and evolving. Furthermore, many businesses already have flexible workplace policies, so it was a relatively smooth transition to WFH. People just had to tune out the “noise” of the nonstop news cycle and ignore the arguing children in the background of Zoom/Webex/Google Hangout calls!
Alex: In January 2020 Two Hop Ventures was planning on performing a roadshow in Asia to complete our targeted raise of €40m, this was, of course, put on hold and eventually cancelled entirely. Many other investors have had similar experiences, however, those with dry powder seem to be investing it as fast as ever mainly on biomedicine that helps alleviate the pandemic or technology that takes advantage of the new normal that has been thrust upon the world. This invariably causes investors to focus on areas that BSV is not currently able to assist in and taking investment away from the ecosystem, so in the short term, we are currently experiencing a shortage of investors in the businesses building on top of BSV, which is far more important and valuable than the coins themselves. Once there are a few real-world applications and businesses using the blockchain for a public synchronised database that can be used as an example of why a business would want to use BSV as a technology I suspect the BSV ecosystem will see an exponential trend for the foreseeable future that may not have an end in sight. I don’t believe we are there yet, but BSV is certainly on the way and ahead of everyone else in the industry.
What are your expectations for 2021 / which sectors of the BSV ecosystem are you keeping an eye on?
Paul: I think 2021 will be ‘more of the same,’ in good ways! More of the growth we’ve seen in 2020 in terms of growth-stage companies and startups alike flocking to Bitcoin SV. We’re already seeing it and are about to close several investments into companies whose business plans are only possible on Bitcoin SV. I think we will also see the ‘bearing of the fruit’ of the growth-stage companies who announced in 20202 that they were building (or moving) solutions on Bitcoin SV. It takes a lot of time to build the kind of solutions these companies announced, and I firmly believe we’ll see high growth in transaction volume from these companies this year.
This is a very sweeping comment, but it is true: We are focusing on enterprises, big and small, in various sectors. Many of them will develop a deep base of end users (consumers). What they have in common is that their solutions are only possible with Bitcoin SV’s superpowers.
Alex: For 2021 there are three sectors that I think are underappreciated but will allow people to see the potential BSV has, these are, practical education, accounting, inventory management. While these sectors are broad they give plenty of real-world applications that do not require too much oversite by regulators but plenty of customisation for specific businesses and products within a great many different jurisdictions. We are completing investments in these areas shortly and will be announcing them before the end of Q1.
Any other thoughts or comments you’d like to add?
Alex: Set big goals but plan in small steps. Focus on what you are doing but keep an eye on your target and competition. Stick to your principles and pivot only when you are certain it is required. For the large majority of people, 2021 is going to be just as unpredictable as 2020, but the year should finish with the world on a much stronger foundation. Information is the most valuable and powerful thing in the information age. Our goal is fixing the biggest problems the world has, whether or not the world knows it, appreciates it, or even understands it, the mission is far too important to lose sight of.
See also: CoinGeek Live panel, Venture Investments for the Future of Bitcoin & Blockchain
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